Market Making

This is a page to explain market making in the new 50/50 NOCLAIM/DAI pool model.

Overview

This page is for market making in the 50/50 NOCLAIM/DAI balancer pool. If you are interested in market making and providing liquidity, please make sure you mint CLAIM/NOCLAIM first on https://app.coverprotocol.com. After minting, you can use about an equal amount of DAI to join the balancer liquidity pool.

Why should I be Market Maker?

By being a market maker, you earn on all trading fees performed by coverage seekers and coverage providers. For every 1 CLAIM traded, there is 1 NOCLAIM worth of volume experienced, leading to much more attractive trading fees and volume. Its a great way to benefit off of coverage seekers and coverage providers by taking a % of the trade every time. If the coverage expires with no incident, you get to keep all the trading fees!

Is it risky being a Market Maker?

By being a market maker, you are benefiting from trading fees while providing easier trading for those interest. However, in the event of a hack or incident on the related protocol, NOCLAIM will rapidly approach $0 and you will possibly lose most staked funds. However, when you mint to become a market maker, you will get an equal amount of CLAIM that can act as coverage for half of your pooled funds.

If you are market making, and are concerned about the security of the product you are providing liquidity for, we recommend you purchase coverage to protect your pooled funds! By market making, keeping your CLAIM, and buying additional CLAIM as coverage for your funds, you get hedge all possible cases!

Market Making: NOCLAIM Liquidity Providing

If you are interested in market making, please follow the below instructions:

You only need to provide liquidity to the NOCLAIM pool. Hold the CLAIM token in your wallet.

  1. Mint both CLAIM & NOCLAIM tokens

  2. Go to "Dashboard".

  3. Click "My Covers" tab.

  4. Click "Add Liquidity" for the NOCLAIM token you're interested in.

  5. Hold the CLAIM token in your wallet.

  6. Click max on one of the two options, it will automatically weight it properly at 50% NOCLAIM and 50% DAI.

  7. Unlock if necessary for steps 3 & 4.

  8. Press add liquidity.

  9. Receive your NOCLAIM Balancer Pool Token (BPT).